Wall Street: Wednesday close

A SHOT in the arm from Microsoft and a dose of sweeter news from Motorola and Yahoo left tech investors feeling better in after-hours trading on Wall Street. That could prime the market for a fresh advance when trade reopens later today.

The Dow Jones Industrial Average overcame an early loss to close up 65.38 points or 0.6% to 10,241.02. The Nasdaq Index edged ahead 9.25 or 0.5% to 1972.04. Nasdaq futures last night pointed to a 60-point gain when trading resumes.

The market had been hemmed in by fresh profit warnings and fears of another Latin American debt crisis. But investors drew encouragement after hours, particularly from Microsoft which indicated that sales were coming in higher than forecast. 'Core revenue growth for the quarter was strong and reflects consumer enthusiasm for our products and services despite a slowing economy,' said chief financial officer John Connors.

Seemingly extending an olive branch to the US Justice Department, the company also said it would allow icons for Internet Explorer to be excluded from its Windows software. Microsoft shares, up $2.02 or 3.1% to $66.50 in the regular session, jumped another 6% in extended hours.

Cellphone giant Motorola climbed 17 cents or 1.1% to $15.67 in regular trading before it announced a smaller-than-expected loss. Its shares were also 6% higher after hours. And Internet company Yahoo, which ended conventional trading down 80 cents or 4.5% to $17.03, was trading at $19.35 in extended hours as it beat lowered expectations.

'The news is going to renew investor confidence that perhaps the economy is in the midst of a rebound and eventually corporate earnings will pick up,' said Peter Cardillo, director of research at Westfalia Investments. 'This should bode well.'

Things were looking so grim at one point that there was speculation that Federal Reserve chairman Alan Greenspan was in an emergency meeting called to cut interest rates in response to Latin American debt fear and Wall Street's continuing profit jitters. The Fed denied such a meeting was under way and said the central bank held only a regularly scheduled weekly meeting to discuss upcoming testimony to Congress and other unspecified matters.

Argentina, which some economists fear is on the brink of triggering another Latin American economic crisis, has had trouble recently convincing borrowers to relax conditions on $130bn (£95bn) in loans.

Investors conditioned to the old Street maxim of 'don't fight the Fed' were nevertheless selling shares early in the session as the procession of dismal profit news hinted of worse to come. Among companies warning that their profits had been hit by the slowdown were consumer products maker Newell Rubbermaid. Its shares dropped $1.67 or 6.9% to $22.70. Comverse Technology, the biggest maker of telephone messaging systems, plunged $13.07 or 34% to $25.95.

Appliance maker Emerson Electric stumbled $8.48 or 14% to $52.93 on an earnings warning. Polaroid dropped 78 cents or 29% to $1.92, down from $50 three years ago, on reports that it could file for bankruptcy protection. Polaroid also said its other options included finding a buyer. Tiffany, the upmarket jeweller, erased an early drop to close ahead 38 cents or 1% to $35.11 after it said its profits would fall to the lower end of analysts' expectations.